This article first appeared on GuruFocus .
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Gross Managed Assets:INR10,365 crores, 31% year-on-year growth, 7% quarter-on-quarter growth.
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Disbursements:INR977 crores, 11% year-on-year growth.
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Profit After Tax (PAT):INR128 crores, 33% year-on-year growth, 5% quarter-on-quarter growth.
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Return on Equity (ROE):17.1%, up by 200 basis points year-on-year.
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Net Worth:INR3,048 crores.
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Portfolio Yield:14.9%, stable year-on-year.
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Cost of Funds:8.3%, down by 20 basis points in Q3, 50 basis points year-on-year.
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Net Interest Income:Up by 31% year-on-year.
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Operating Expenses (OpEx) to Managed Assets:4%, down by 20 basis points year-on-year.
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Gross Stage 3 Assets:1.5%.
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Credit Cost:0.5% for nine months.
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Provision Coverage Ratio (PCR) for Stage 3:25%.
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Return on Assets (ROA):5.8%, up by 30 basis points year-on-year.
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Liquidity:INR486 crores with undrawn sanction of INR1,300 crores plus.
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Release Date: February 09, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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India Shelter Finance Corporation Ltd ( NSE:INDIASHLTR ) reported a 31% year-on-year growth in gross managed assets, reaching INR10,365 crores.
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The company achieved a profit after tax of INR128 crores for the quarter, marking a 33% year-on-year increase.
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Return on equity stood at a robust 17.1%, indicating strong profitability.
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The company has successfully expanded its branch network, adding two new branches in the quarter and planning to add four to five more in the next quarter.
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Digital sourcing initiatives are gaining traction, contributing 4-5% of disbursements, with plans to increase this to 10%.
Negative Points
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Gross Stage 3 loans increased to 1.5%, indicating a rise in non-performing assets.
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Asset quality issues were noted, particularly in lower ticket size loans, which are facing higher delinquency rates.
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The company's interest income growth lagged behind its AUM growth, suggesting potential yield compression.
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There was a noted increase in credit costs, with guidance indicating it will remain around 40-50 bps for the year.
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Employee attrition at the branch level remains high at around 35%, which could impact operational stability.
Q & A Highlights
Q: There's a sharp rise in gross Stage 3 loans this quarter. Is there any pocket of stress, especially in MP and Karnataka? Are those portfolios showing any stress? A: The NPA numbers for both LAP and HL remain within the same range. There is no significant geographical challenge, but there are slight increases across various regions. We have taken steps to address this by moving some accounts to legal action to manage the situation better. We expect improvements in the coming quarter. - Rupinder Singh, CEO
Q: Our interest income growth has been lower than our overall AUM growth. Is this due to lower yields or a shift in mix? A: The dip in AUM growth is due to market conditions, but we are seeing green shoots of recovery. Our disbursement yield for the quarter was 14.6%, and we maintain a spread of over 6%. We expect the situation to improve in the coming quarters. - Rupinder Singh, CEO
Q: Can you provide some insight into the 1+ DPD trend and current collection efficiency? A: The 1+ DPD remains around 8.7% to 8.8%. Collection efficiency in fresh buckets is stable, but higher buckets are challenging. We are taking legal actions to improve the situation. - Rupinder Singh, CEO
Q: What is the guidance for disbursement and AUM growth for FY27? A: We aim for a 30% AUM growth, maintaining a 60-40 ratio between HL and LAP. The overlap with microfinance customers is around 4% to 5%. - Rupinder Singh, CEO
Q: How is the digital sourcing strategy progressing? A: We have set up an in-house digital team, and digital sourcing currently contributes 4% to 5% of leads. We aim to increase this to 10% to 12% in the coming quarters. - Rupinder Singh, CEO
Q: What is the outlook on cost of funds and margins going forward? A: Our marginal cost of funds is 8.1%, and we expect a further reduction of about 20 basis points with a potential rating upgrade. We aim to maintain a spread of about 6.5% on fresh disbursements. - Ashish Gupta, CFO
Q: What is the current status of the PMAY scheme? A: The PMAY scheme has gained traction, with over 2,000 customers funded. We expect further improvements as technicalities are resolved. - Rupinder Singh, CEO
Q: How are attrition rates trending, and are there any geographical nuances? A: Branch attrition is around 35%, consistent across quarters. Geographies with more vintage branches have lower attrition due to better employee integration and productivity. - Rupinder Singh, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
